A group of construction professionals is pressing the federal government to crack down on “unscrupulous contractors” they say have made it impossible for law-abiding companies to compete in the industry.

In a letter sent to Public Safety Minister Vic Toews last week, Wayne Cox, executive secretary-treasurer of the B.C. Regional Council of Carpenters, said the problem of unethical payroll practices and illegal workers in the Lower Mainland is rampant.

Cox also represents a group of non-union and union industry workers that authored a 2011 discussion paper on the issue that was sent to the Canada Revenue Agency, the Canada Border Services Agency and the RCMP.

“The construction industry in Vancouver, in particular the carpenter, formwork and drywall sectors, have been devastated by the use of illegal immigrants by unscrupulous contractors,” the letter states.

“Low wages, payment by cash … and other illegal schemes have made it virtually impossible for legitimate employers to do business and employees to earn a living wage in the construction industry in Vancouver.”

Cox commended Toews on the high-profile Canada Border Services Agency raid earlier this month that resulted in the arrests of eight men working at an east Vancouver construction site. The raid was filmed by a TV crew for the documentary series Border Security and at least five of those arrested have been issued deportation notices.

In an interview Monday, Cox said the raid has pushed the issue of illegal workers on to the public radar. But his letter encouraged Toews to get to the root of the problem by publicly prosecuting employers.

“We anxiously await the (Border Security) episode where the real culprits, the contractors and subcontractors who devise these illegal schemes, are arrested, fined and serve jail sentences,” he wrote.

Under the Immigration and Refugee Protection Act, employers who hire undocumented workers can face fines of up to $50,000 and two years in jail, but prosecutions are rare. In 2012, only two charges of employing foreign nationals were laid by the Canada Border Services Agency and one was withdrawn. There were only five convictions nationally in 2010, resulting in fines ranging from $1,000 to $25,000.

Cox said the problem is so widespread it has nearly forced unionized workers and law-abiding companies out of the running for jobs in Metro Vancouver’s highly profitable condo-development sector.

“The vast majority of work in the Lower Mainland is non-union,” Cox said. “We’d be in the single digits.”

Contractors and subcontractors who employ illegal workers or pay cash to avoid taxes are able to undercut their competition, said Cox, virtually forcing companies to break the law to remain competitive.

But the industry is split on the prevalence of illegal payroll practices. Independent Contractors and Business Association president Philip Hochstein said none of his members have reported similar complaints.

Contractors who break labour and immigration laws should be punished but determining the extent of illegal practices may be next to impossible, said Hochstein, whose organization represents non-union construction companies.

“It’s like trying to quantify the underground economy,” he said.

Concerns over Metro Vancouver’s underground construction economy have been mounting in recent years. The 2011 discussion paper details several allegedly common practices in the industry including:

• Contractors failing to remit source deductions such as HST and WorkSafeBC deductions;

The fallout of these practices has been to prevent law-abiding companies from successfully bidding on jobs and to discourage Canadians from entering the trades because wages have been kept artificially low, the document argues.

Wages for journeyman carpenters in the Lower Mainland were between $22 and $24 an hour in 2011 — an increase of less than $5 since the mid-1990s, the paper states. In other jurisdictions such as Toronto or the Alberta oilsands, wages for that type of work approached $40 an hour.

The coalition would like senior levels of government to concoct a solution requiring document checks at construction sites and engaging agencies such as WorkSafeBC in enforcement.

Canada Border Services said it could not confirm or deny whether the contractor who supplied the workers arrested in the March 13 raid — BSSM Construction Ltd. — is being investigated.

BSSM president Serhat Seyhoglu told The Vancouver Sun last week he had been contracted to supply the illegal workers, who had been painting condos at the Cressey development site on Victoria Drive near 20th Avenue.

Seyhoglu told The Sun he had indirectly hired them through another subcontractor and insisted he had “nothing to hide.” After agreeing to an in-person interview with The Sun, Seyhoglu could not be reached and failed to answer repeated phone calls.

Doors at his Richmond office were locked during a visit by The Sun last week.

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Construction industry group calls for government crackdown on 'unscrupulous contractors' in Metro Vancouver

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